California Senate Bill 989 defers property taxes for taxpayers claiming Proposition 19 base year value transfers when the county assessor has not completed its determination of the property’s eligibility for property tax relief under that section. Additionally, the property tax bill must contain information regarding Proposition 19 base year value transfers and potential tax deferment in large counties.
Background
Prop 19 came into full effect on April 1, 2021, and extended tax savings based on tax basis portability across the state to those 55 years or older, among others. Yet many homeowners who should have received the tax benefits of Prop 19 have been unable to realize these savings due to bureaucratic delay.
In March of 2022, the Los Angeles Times reported that the Los Angeles County Assessor’s Office had not completed 1,271 claims for base year value transfers. As a result, the Los Angeles County Tax Collector issued property tax bills to some taxpayers based on the purchase price of the replacement dwelling that did not account for the transfer even though taxpayers had filed their claim as required by Senate Bill 539 (Prop 19 implementing legislation).
How does Senate Bill 989 work?
1) Provides that payment of property taxes for a property is deferred, without penalty or interest, if the property owner:
a) Claims a Proposition 19 base year value transfer for the property, but the county assessor has not completed its determination of the property’s eligibility for property tax relief under that section.
b) Requests deferment with the county assessor within one calendar year, but before January 1, 2024, of receiving the first tax bill for the property.
2) Requires payment to be deferred until the county assessor has reassessed the property and the tax collector issues a corrected tax bill to the property owner, or the county assessor determines the property is not eligible for the transfer and has notified the property owner.
3) Provides, if deferred, that taxes are due and payable for the first installment:
a) December 10, or 30 days after the date the bill is mailed or electronically transmitted to the owner, whichever is later, if the property is eligible for the transfer.
b) December 10, or 30 days after the postmark date or date of mailing printed on the county assessor’s notice to the property owner, whichever is later, if the assessor determines that the property is not eligible for the transfer.
4) Provides, if deferred, that taxes are due and payable for the second installment:
a) April 10, or 30 days after the date the bill is mailed or electronically transmitted to the owner, whichever is later, if the property is eligible for the transfer.
b) April 10, or 30 days after the postmark date or date of mailing printed on the county assessor’s notice to the property owner, whichever is later, if the assessor determines that the property is not eligible for the transfer.
5) Provides that taxes unpaid after the above dates become delinquent at 5 p.m., or the close of business, whichever is later, of the due date and subject to delinquency penalties in current law.
6) Requires each tax bill for properties that have been purchased, newly constructed, or changed in ownership in the year preceding the tax bill to include a disclosure with the following information:
a) A brief summary of the availability of the property tax relief under Proposition 19.
b) A brief summary of deferment procedures provided by this bill.
7) Applies both its property tax deferment and property tax bill information requirements in counties with a population of more than four million according to the 2020 census, or those that enact an ordinance implementing this bill’s requirements.
8) SB 989 sunsets on January 1, 2026.
Senate Bill 989 is codified as Revenue and Tax Code § 2610.8.
This act is an urgency statute which takes effect immediately on September 28, 2022.
Sources:
Official CA Legislative Information: https://legiscan.com/CA/bill/SB989/2021
Board of Equalization: https://www.boe.ca.gov/legdiv/pdf/989sb062922hn.pdf
– Devin Lucas
Author Devin R. Lucas is a REALTOR®, Real Estate Attorney, and Real Estate Broker , specializing in Newport Beach, Costa Mesa and Orange County coastal communities, serving individual and investors in residential real estate.
Lucas Real Estate – REALTOR® and Attorney Devin Lucas and REALTOR® and CPA Courtney Lucas – are experts in California intra family transfers using all aspects of Propositions 13, 58, 193, 60, 90 and new Proposition 19. Learn more about how Lucas Real Estate may help your family transfer by clicking here.
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